Everyone to the 42nd annual JPMorgan Healthcare Conference. My name is Anupam Rama. I'm one of the senior biotech analysts here at JPMorgan. I'm joined by my squad, LaRhea Hall, Priyanka Grover, Malcolm Kuno. Our next presenting company is Zai Lab. Presenting on behalf of the company, we have CEO Samantha Du. Samantha?
Thank you, Anupam. Thank you for inviting me to this conference. Also, good morning, everyone, and really look forward to spending the rest of 20 minutes or whatever, 40 minutes with you. I see a lot of familiar faces in the audience. Also, I see some faces are new. For those of you who are not familiar with Zai's story, I'll just give you a quick introduction. Zai Lab was founded. Oh, first of all, my name is Samantha Du, CEO and founder of Zai Lab. The company was started 10 years ago. Our mission at the time, still now, is to form a innovative biopharma company, started from China, then to the rest of the world.
So I spend the next 20 minutes to share you with you our you know company goals, company achievements, and future growth. Thank you. So this is a safe harbor slide. I'm sure you all know this, right? Okay, so our vision, as I mentioned at the very beginning, our vision has never changed. So we want to be a global innovative biopharma leader. But by doing so, we really we realized back to 2014 there is a tremendous opportunity to build a company with a different business model, instead of everything coming from internal discovery lab, waiting for 12 years to see approval, right? We started with working with lots of biotech modern companies in the U.S. with assets we believe has potential market potential to treat patients with unmet medical needs in Greater China.
I'm very pleased to let you know that over the last 10 years, we made a transformative change to the company. We have achieved such a big pipeline of not only first-in-class, majority of them are first-in-class, but best-in-class, assets. We have five in commercial stage. We have potentially much more in the later stage. I'll, I'll talk more later on. But of course, all of this supported by the huge unmet medical needs in China and the aging population. But of course, to continue to be. Of course, not only commercial pipeline, we're continuously building our later stage pipeline with the first best-in-class to fuel our growth, commercial growth, near term and medium term.
We also, with that, and of course, all of that also supported over the last few years the policies more and more towards innovation-driven and medical needs-driven, and from both NRDL and also NMPA. So we are a big beneficiary of those policies. Of course, eventually, we would culminate with our accumulated knowledge, accumulated expertise, and our accumulated capabilities, both in research, development, and commercialization, we are going to achieve our global ambition. So I'll share with you in later slides. So let's go back to last year. Last year, we truly have lots of achievements together by the team from all functions. From commercial, we have, as you see, we have five products on the market.
I won't go to details about each one of them for the sake of time, but I'll talk about VYVGART. Last year, we got approval in June 30. Then we were able to launch and list it on NRDL. And start from January 1st, we'll be fully covered by NRDL. This is a very big unmet medical needs in China. And ZEJULA, even though we were not the first one to launch, but we right now is market leader in China, in the PARP class, you know, ovarian cancer in China. I want to talk a little bit about Optune, not because it's you know, the revenue is huge. It's only close to $50 million.
But what I want to talk about, this is a very unique Category III device, even though it's not covered by NRDL, but we are covered by the supplemental healthcare insurance provided by provincial and also citywide. We are so far the second most covered product, only next to KEYTRUDA. On the right side, I'd like to talk about our exciting near-term pipeline. And our near-term approval for twen- this is what in 2023 we have done. We have already submitted three NDAs. All three has been accepted. Some of them already been put on the fast-track approval. They are the VYVGART Hytrulo for gMG, AUGTYRO for lung cancer. Not only that, we have four pivotal data readouts, all very positive. One is for CIDP, for the VYVGART Hytrulo, KarXT for schizo, schizophrenia, TTFields and Tivdak.
The Tivdak is for cervical cancer, has a very good synergy with our ovarian cancer. Of course, we also, over the last few years, tried to develop internal pipeline, internal research with global rights. I just listed here a few, three of them as a representative. This is a five-years projection for Zai Lab's growth. What I want you to take away from this slide is, not only you start from VYVGART, this is truly a pipeline of product, and also this is such a huge unmet medical needs. We have a lot of confidence in this product. As you know, globally, first year, whole global sales already reached $1 billion.
But in China, we have very well accepted by the medical community, and we have prepared a team ready to do the launch for after January first for NRDL with the NRDL coverage. We also have on the slide, you also see several other blockbuster drugs, KarXT, bemarituzumab for gastric cancer, KarXT for schizophrenia. Of course, we also have Tivdak and others for the next five years to launch. Lots of people ask me this question. I want to first make a disclaimer. I'm not a government official, and I'm only just here from my personal observation. I feel like overall, you know, over the last few years, China has really more and more focused on life sciences.
They realize, especially in innovation life sciences, because the huge aging population, and also, based on the, you know, China's not only the pharma investment, but also from the government, they continue to come up with new funding to support fundamental research. From NMPA, which is equivalent to U.S. FDA, over the last year alone, there are several policies. One is, they talk about clinical driven oriented development of oncology drugs, but also, they also give very clear guideline to accelerate drug approval for drugs with unmet medical needs. So much more transparent than a few years ago. I think, I can. Over the last few years, the trend becomes more and more—you see more and more clarity, more and more transparency.
Even this year, NR, NHSA, which is, the, we call that also NRDL, who, is the one to define the drug price for reimbursement, national reimbursement. They also published several policies. One is to simplify the renewable process, and, if anybody interested, I'll elaborate later. But, for the interest of time, I'm just passing by. But, the next one, I think, is really, very effective. Also, we can see the immediate effect, is to differentiate drugs, whether it's me-toos versus your unmet medical needs. VYVGART Hytrulo is one very good example. We benefited from that. Well, I was talking about when I was talking about the three drivers, the field. Well, when we were talking about our long-term growth, these are the three drivers. Later on, I'll elaborate.
One is we definitely need to accelerate our top line growth. This is supported by our strong R&D and commercial execution. My two presidents of R&D, Dr. Rafael and Dr. Harald Reinhart, are here. I contribute lots of our R&D success to both of them and many people working with them. So over the next three years, we have seven new launches. Many of them are blockbuster potentials. By 2028, we have more than 15 commercial products on the market. We'll also maximize our potential with new indications, as we always called evergreening in my old Pfizer terms. Of course, it's important for companies to achieve profitability after 10 years. We definitely want to go through—we're going to reach that by 2025.
That's what is our goal, end of 2025, by increasing productivity on top line growth, but also, we will leverage across the organization through what we had built, the infrastructure, commercial, R&D, and also our supporting functions. We'll continue our R&D prioritization, and we'll continue to. Also, what I'm proud of is we have cash. We have enough cash resources to expect to take us through profitability. Cash is king, right? And, of course, ultimately, for us, we are not a, we're not a company for us, we don't believe patients have borders. We believe medicines have no borders and science has no borders. So we will bring our internal discovery and also our proven track record of BD capabilities to build our global pipeline.
I mentioned three of them already through our internal R&D, but in the next few years, we'll continue to build our global pipeline through both internal discovery and also through business development. We'll file at least one Global IND per year. So to achieve our top three priorities over the next few years, of course, here is talking about how we grow top line. On the left side is a historical historical slide, shows when we took ZEJULA to the market as a small biotech, and we were the second one entered to the market. Our competitor is a very large multinational, a very well-known in China for oncology launches. But quickly, we are now number one market share in the PARP ovarian cancer in China.
Globally, we actually in China, we have 42% of market share versus the same product in other parts of the world, which shows our commercial team's strong execution and strong recognition by the medical community. I use Optune as an example, not because it's our top product, but really, this is a product, as I mentioned earlier, is a Category Three device for, you know, for a tumor, for brain tumor. But even though it's not on the NRDL reimbursement, but we were able to get the coverage from local and provincial government, and the most covered other than KEYTRUDA, second to KEYTRUDA. But going forward, what I'm trying to say is, our demonstrated proven commercial capability will help us to launch VYVGART and beyond. So VYVGART, so VYVGART, right?
We already, as I mentioned, covered by NRDL, and the price is $800 per vial, $800 per vial. We also, the medical need for gMG in China is huge, more than 17,000 patients, new occurrence patients. This is truly a pipeline of product opportunity, and NRDL price really reflects this high clinical value. Of course, this is one... I don't want to spend too much time on this, but I just want to-- because I think a lot of investors ask VYVGART's launch in 2024. But I just give you a, on the left side, a historical perspective for the last six months, what we have achieved. We have already achieved, and, so basically, we already achieved 100% of top 200 target hospitals reached in person by our sales reps.
Remember, that's under China's anti-corruption period. And also, we have very strong KOL support. 90% of the top 100 physicians have already prescribed VYVGART over the last six months when we don't have any insurance coverage. But going forward, this will really pave our expansion. We expect to outreach to approximately 1,000 hospitals in 2024, and this accounts for more than 80% of total patient volume. We of course will leverage our existing commercial platform, and we have dedicated approximately 156 sales reps post-NRDL. And we're going to leverage our, as I said, our current commercial infrastructure. And also, when CIDP got approved, this will also give us significant synergy and overlap of physicians treating gMG in China.
This slide shows we not only have a VYVGART and our sixth product to launch, we also have a late-stage pipeline. Most of them, if you look at the patient population on the third column, you also look at them, they are best first in class and best in class, and a lot of them are only in class. So this shows our pipeline in the medium term has a tremendous upside. Of course, I talk about top line growth. Now I want to talk about how we're going to achieve profitability. Of course, always you have to revenue, top line growth, supported by 50% compounded annual growth from 2023 to 2028. And also, we expect with the new product launches and maximize our potential with new indications.
From the cost of goods and SG&A, we'll continue to increase in scale, potential for more local manufacturing, and also leverage existing infrastructure to support new launches. We're always an organization very careful about, you know, shareholders' money, how to be cost-effective, and how to be, you know, effective in spending our money. On the R&D front, we'll continue with our portfolio prioritization without compromise our future potential. So another way, of course, from commercial through, and even from development, to reach the synergy, to have a cost effectiveness, is have a TA-focused organization, which can drive not only leadership in the field, but also leverage the existing platform, existing capabilities. For example, for women's health, we have ZEJULA for ovarian cancer, and Tivdak is cervical cancer.
But of course, in GI, we have QINLOCK, we have bemarituzumab, we have Adagrasib, TTFields, and many others. So this is very important to build synergy and to leverage your clinical organization and also our commercial organization to maximize their value proposition. I know my time is getting close.
It's all good.
Okay, great. So our next goal is, like I said, we want to achieve top line growth, profitability, but also global pipeline. I want to talk about our discovery effort internal. On the left side, we have very focused discovery effort, and we focus on certain targets in oncology and autoimmune. And on the right side are the three internal discovery programs already enter global clinical trials. Of course, we not only focus internal R&D, internal research, we also believe the world is... There are many expertise outside. We will work with partners, work with potential, you know, and who have the academic institutions. On the left side, what I want to say is, this is our past track record.
Our R&D team, our BD team, you look at this, what our success rate. We have licensed most of the programs. For example, Five Prime. We licensed bemarituzumab, when we only have six patients. So now, you know, company, two, three, I don't remember, two years ago, bought by Amgen. So a lot of our pipeline, we were very early into it. That really demonstrate the team's drug hunter capability, our science, our medical drug development insights and our team's execution capability. And these partners really work very well with us 'cause we are not only able to, register, develop in China, commercialize in China, but also we are contributing to global multiple centers. We are accelerating global development by shortening their, you know, time in the clinical states, by extending the patent lives.
So we have very good partners working with us. So ongoing strategy, we'll continue to leverage our strong BD capabilities. So of course, lots of licensing rely on our R&D, insights, knowledge, all of that. We'll continue to leverage our existing platform to develop global assets. Of course, if things have blockbuster potential in China, we would not give up on that. We'll continue to play our strength. And we're also optimistic about building strategic partners to create shareholder value. So let's talk about this year. I think a lot of people may say, "Okay, so that's your good future. Tell me what they're going to deliver this year," right? Of course, number one, always commercial execution for VYVGART, right? Plus ZEJULA and other products on the market already. And clinical development, we already had bemarituzumab in two phase III trials.
The team are really working hard to recruit global patients. We have also CAR T finishing global bridging, finishing China bridging studies. We also have many others in development. I won't list for the sake of time. For clinical data and regulatory actions, we have already filed, and we already planned China submission, four of them. Not only the subcutaneous efgartigimod for CIDP, but also AUGTYRO, Tivdak, and TTFields. We also have already accepted and also potential China approval for four of our products. XACDURO, subcutaneous efgartigimod, repotrectinib, TTFields. We also have two clinical data readouts this year. So now let's go back to when I started about Zai Lab's ambition.
I think since day one to now 10 years, we have unwavering commitment, conviction, say we want to build a global pharma, starting from China, but to the globe to the rest of the world. We truly believe patients should benefit from our discovery, our research and our drug development capabilities. So we are accelerate our top line growth, achieve profitability and building global pipeline. I think this is my last slide, but I want to in conclusion, thanks everyone for being here today. Again, I know you can spend your time anywhere in this conference, but being here today shows your support and interest. I also would love to really appreciate our patients who entrust their lives to our drugs and our investigators, our KOLs, our physicians, and our partners, our investors, for your unwavering support to Zai.
Last, certainly not the least, is the team. We have such a strong team. We have one company, one dream, and we're going to achieve that. Thanks, everyone.
So many of you have been in presentations with me and know that what I'm going to say now, there are three ways to ask a question, yeah? So there is the old school way, raise your hand and I'll call on you. There's, you know, the hip new way of doing it, you use the portal, submit a question, it'll show up in this iPad. I'll ask on your behalf without disclosing your name. And if you want to go even more secretive, you can just email me, and I will ask the question on your behalf. But Samantha, you showed a really, really interesting slide on sort of the VYVGART initial progress and laying the foundation for growth.
Maybe you can expand a little bit on what you think the key drivers are for 2024, and maybe talk about the NRDL pricing.
Maybe I'll give Samantha a chance to drink some water and take that one, Anupam. I'm Josh Smiley, I'm the President and Chief Operating Officer for Zai. So I think first with VYVGART, we're really excited about the progress to date. As Samantha mentioned, it was approved at the end of June of last year. We had commercial product available in early September, and this was all pre-NRDL. We're thrilled to report that we've treated 1,000 patients already in China, so we're quite excited about the uptake that we see there. That was pre-NRDL, so all of the challenges that come with that, both in terms of the anti-corruption efforts, but also the affordability challenges. Now, with NRDL listing, Samantha mentioned an $800 per year price.
If you take that out in terms of the number of vials that are typically used, number of cycles, that equates to about a $32,000 annual price for treatment. We're quite excited about that opportunity and the ability to take that price now and launch to a much broader patient population. So Anupam, I think first, in terms of 2024, a big driver will be continued success and execution with VYVGART in patients with gMG, and we think we have a really good opportunity in front of us there. With three more launches that we'll look forward to in 2024. One will be the subcutaneous version of efgartigimod or VYVGART. We'd expect an approval sometime this year, and we'll launch thereafter, so to complement the IV formulation that's available today.
Repotrectinib, which is, should be approved and launched for, lung cancer patients with a ROS1 positive mutation, and then XACDURO, our antibiotic for hospital-based infections. It's a significant challenge in China, and this is a really important medical advance. So we've got three launches that we'd look forward to there. Followed then by, in 2025, a couple more that I think will be important. CIDP, as Samantha mentioned, efgartigimod is really a pipeline in a product. We'll get the next new indication approved in 2025. Hopefully, argenx has submitted that package in the U.S., and we'll look to leverage that submission and submit in China this year for approval in 2025. I think that's probably the most meaningful next launch opportunity.
So I think when you look at those things together, that will drive significant sales growth and certainly put us on the path towards profitability in Q4 of 2025.
... Questions from the audience? Yeah, go ahead.
I probably just yell out.
Just yell it out.
Okay. So, the data is basically, like, you know, from Samantha's, office, is in the sort of transitioning from new licensing late-stage assets into, both late phase and also homegrown home discovery assets in the early phase. So it's like a shift of different type of data-informed decision making and also a different, you know, strategic decision making on the, profitabilities. So how, how would you envision this journey will take in, in Zai Lab? Thanks.
You want me to take it?
If you, if you wanna make a couple comments.
First, yeah. First of all, even when we did the in-licensing for Greater China rights, most of them are now really late-phase, right? It's, like I mentioned, five prime, we only have six patients. So the team has a very strong, I think, scientific, drug hunter capabilities, understand from very early on and have a high probability of success. And of course, when the company was founded, that was 10 years ago, China just in the discussion joining ICH. So we saw that opportunity. And also we realized if we take 12-15 years just do a discovery and maybe, you know, never make any profit for investors, it's not sustainable.
So at that space, our goal is to make us take the advantage of a life, you know, generation opportunity to have these assets and make us to profitability. But in the meantime, we never forget where our root. Many of us are drug hunters, developers in our life, you know, discovered and developed many drugs, you know, and still on the market. So we'll put money back to discovery, but we've always been very mindful of what. We are not a big organization. We want to be focused. We want to focus on things we know the best, and we want to supplement that with our BD knowledge.
When you think about the revenue contributions to getting to corporate profitability next year or exiting next year, you know, what are gonna be the biggest contributors, based on your commercial products, I guess, that are existing and could be coming?
Sure. I think first, as ZEJULA is our biggest product, it is profitable today, and we'll, you know, we expect continued growth in 2024, and I think it'll generate, you know, significant margin towards that overall profitability goal. The next biggest contributor will be VYVGART, even though we're only talking about the beginning of launch now. I think the opportunity here with the patient population and what we see in terms of initial uptake by Q4 of 2025, it should be a significant contributor to our overall profitability goal. So I think those two products certainly will be big drivers. As I mentioned, we'll be launching other products over that time period.
You put that growth in non-promo, we've, you know, we've talked about, and Samantha showed it on the slide, a compounding annual growth goal of 50% between 2023 and 2028. That gets jump-started by the VYVGART launch, so that's not a back-end loaded number. So if you think about a growth rate of something in, like 50%, on top of then relatively modest SG&A increases in the next two years, even though we're launching new drugs in new categories, we're able to leverage a significant amount of the infrastructure we've already built, and we're able to launch into very targeted areas with VYVGART. So we expect to see sales and marketing grow in investment terms at a rate considerably less than sales. Our G&A corporate infrastructure will really be flat.
We've built a corporate footprint, and now we'll leverage that through our sales efforts. R&D, we're spending. Once you sort of normalize out the milestones and the upfront costs, we're at about $250 million investment. We see that as appropriate for the next few years, so we should be able to manage that pretty flat, and still advance all the pipeline projects that Samantha referenced and continue to bring new things into the company. We're able to do that both because we're continuing to focus on productivity, ways to get more, you know, more efforts out of every dollar we spend, but also we're gonna be concluding a series of phase III trials for efgartigimod, for bemarituzumab, for KarXT. We can take that money then and recycle it back into new opportunities.
So relatively flat R&D spending, modest growth in SG&A, and, you know, great sales growth from the product launches and portfolio that we've mentioned.
Questions from the audience? Yeah. Okay.
Yeah, maybe I'll ask another question. Maybe quickly, I think your vision to become a global biotech leader, independent of the U.S. market, what is your kind of strategy here, other than trying?
I think, you know, when you say global, you cannot ignore U.S., right? U.S. still number one market, and, most of us, right, all work in the multinationals in Pfizer or, you know, really a lot of multinationals started our career. So when we talk about global, U.S. is definitely our main focus... And not just R&D, but eventually, if we see the right product, just like Takeda, right? In many years ago, only focused in Japan, Daiichi Sankyo, they are evolved into U.S.. So we have the gene. We are not a local, local company. We are global. We are at least the people we recruited have global mindset, global drug development experience, so we are capable to do that.
Maybe I'll ask the final question here. Maybe one for both of you actually, which is: if you have to pick one or two products that you think, either near term or long term, that the street is really underappreciating in your pipeline, what would they be and why? So one or two from both of you.
All right. Well,
It doesn't have to be the same answer.
I'll start, and I'll try to be quick. Even though we've spent a lot of time talking about VYVGART, I think the opportunity for VYVGART in China is really significant. We've said we see a billion-dollar annual sales potential over time. I think if I look at consensus models, it's still considerably below that. I think our initial pricing, our experience with patients so far, and physicians, gives us a lot of confidence that we can, we can. You know, with the right kind of execution, we can get to that number. So I'd say that's one. I think the second, a little bit later, out in the decade is KarXT, our schizophrenia product.
We're in the middle of a bridging study now and would expect to conclude that soon and, you know, be headed towards a launch in the middle of the decade. I think the opportunity to provide a new treatment for patients with schizophrenia in China is significant and probably underappreciated as well. I think analyst consensus models have it somewhere in the $300 million-$350 million range. Again, we see there's 8 million patients in China. There's a big opportunity here, and the KarXT drug is a great innovation, so we're excited about that one.
Samantha, quickly?
Yes, and quickly, I'd like to say, because of the policy continuously evolve to support first-in-class and best-in-class medicines, right? Not only from the NMPA, but also from the NHSA. So I think many of our products has first-in-class, best-in-class potentials and will enjoy the pricing advantages. I think many of them can be blockbuster drugs.
That's not one or two. That's the whole pipeline. Jonathan, want to contribute one? I mean, just throw maybe an oncology one.
Bemarituzumab, I think this would be.
All right. Bemarituzumab from Jonathan Wang. There you go. All righty, guys. Thank you.
Thank you.
Thank you.
Thanks. Thanks, everybody.
Thank you, and applause.